Tuesday, 16th July 2019
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Almost Half of C-suite executives admit to launching transformation initiatives without a clear strategy

Eight out of ten executives admit they do not review internal processes before setting transformation goals.

New research released by Celonis has found that despite significant pressure to embark on transformation initiatives that enable greater productivity, improve customer service and reduce costs, most businesses remain unclear on what they should focus on. The results showed that almost half of C-suite executives (45%) admit they do not know where to start when developing their transformation strategy. The Celonis study explores how businesses are approaching transformation programmes, as well as the disconnect between leadership and those on the frontline.

The survey of over 1,000C-suite executives and over 1,000 business analysts found that many organisations have wasted significant resources on business transformation initiatives that have been poorly planned. In fact, almost half (44%) of senior leaders believe that their business transformation has been a waste of time. With a quarter (25%) of businesses having spent over £500,000 on transformation strategies in the last 12 months, many organisations run the risk of incurring huge costs with no return.

Top-down strategies are stunting results

It’s no wonder that transformation initiatives aren’t hitting the mark, because business leaders are not using the expertise of those closest to running the organisation’s operations. The results highlighted a disconnect between those developing transformation strategies and those carrying them out:

  • Almost 4 in 10 (39%) business analysts said they are not regularly consulted to inform their organisation’s transformation strategy.
  • Well over half (58%) of business leaders admitted that frontline workers are only involved in transformation initiatives because middle management or consultants tell them which changes to make.

Businesses are skipping square one

In addition, the study demonstrated that most organisations are struggling with transformation initiatives because they are diving into execution before understanding what to change first. In fact, more than eight out of 10 (82%) C-suite executives admit they do not review their internal business processes to understand what needs to be prioritised when setting initial goals and KPIs for a transformation programme. Perhaps this is because they don’t know how to gain this visibility; almost two-thirds (65%) of leadership state they would feel more confident deploying their transformation strategy if they had a better picture of how their business is being run.

And this trend has trickled down to the entire organisation. The research shows that almost two-fifths (39%) of analysts are not basing their work on internal processes when executing the transformation strategy given to them by senior personnel. Ultimately, this highlights that business leaders are investing in transformation initiatives because they think they should and not because they have identified a specific problem.

Look too far ahead and stumble in the present

Despite acknowledgement that an understanding of the here and now would be beneficial to inform transformation strategy, businesses are still jumping straight into tactics. For example, almost three quarters of C-suite executives cite AI/machine learning (73%) and automation (73%) as areas they want to maintain or increase investment in. In contrast, less than a third (33%) of senior leaders state that they plan to invest more in getting better visibility of their processes. But for those organisations that want to increase their investment in AI and innovation, understanding their current processes first could help them to work out which technologies would be most beneficial to their business.

“Transformation strategies will inevitably be part of every organisation’s operations, because no business can avoid adapting to the latest industry and technological trends,” commented Alexander Rinke, co-founder and co-CEO, Celonis. “However, they should be founded in concrete insights derived from processes that are actually happening within a company. Our research shows that too many businesses are rushing into costly initiatives that they do not necessarily even need to embark on. They are falling at the first hurdle; having a better understanding of inefficiencies in underlying business processes can help organisations invest wisely to provide the best possible service for their customers.”

“From early stages in digital transformation to post transformation, organisations must understand how internal processes can shape their business strategy,” added Jeremy Cox, Principal Analyst, Ovum. “Quantifying the business impact of existing or newly adapted processes, can help optimise the environment for customers. Ovum's annual global ICT Enterprise Insights research based on around 5000 enterprises reveals a consistent picture of struggle, as industry by industry around 80% have made little progress. While there are many reasons for this difficulty, a forensic examination on how work gets done, aided by intelligent process mining technology, would help quantify the consequences and drive consensus on what must change.”

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